Appleby acted as lead counsel to international banking
group Standard Chartered in connection with the consolidation in
September 2013 of its two Jersey banking entities (Standard
Chartered (Jersey) Limited and Standard Chartered Bank, Jersey
branch) into a single operating platform for its Jersey
The transaction was ground-breaking in its use of the Banking
Business (Jersey) Law 1991 (Banking Law) which
allows Jersey banking business (technically deposit-taking
business), to be transferred from one bank to another by means of a
court-sanctioned scheme. In this case the Court
confirmed its jurisdiction to transfer investment business
alongside banking business under the scheme, despite the lack of
clear permissive wording in the Banking Law.
The Court has now issued a further judgment following the
sanctions hearing. The judgment contains helpful guidance on
the principles to be applied by the Court when considering an
application to sanction a scheme given the lack of statutory
guidance in Jersey and in the equivalent English laws. In the
absence of Jersey authorities, the Court considered Re AXA
Equity and Law Life Assurance Society and AXA Sun Life Plc  1
All ER (Comm) 1010, noting that it had been transposed by the Royal
Court into the Jersey context for long term insurance business
transfers. In summary following that case the principles to
be applied include:
the absolute discretion of the Court must be exercised by giving
due recognition to the commercial judgment entrusted by the
companies' constitution to its directors;
the Court is concerned whether an interested party or group
(including customers, employees and creditors) will be adversely
affected by the scheme;
the Court will pay close attention to the views of the
the scheme, whilst being fair, does not have to be the best
possible scheme in the Court's view as that is a matter for the
the details of the scheme are not a matter for the Court
provided the scheme as a whole is fair.
After satisfying itself that the required formalities under the
Banking Law had been complied with (including the provision of an
independent auditor's report and customer notifications), the
Court in the Standard Chartered case took into consideration a
number of features in assessing the fairness of the scheme
including the financial standing of the transferee and the
operational impact of the scheme on customers. The
Court also noted that there were no objections to the scheme by
customers or creditors. Taking all matters into account the Court
was satisfied that the scheme was fair overall and sanctioned the
The Appleby team was led by Wendy Benjamin, Practice Group Head
for the Corporate & Commercial department in Appleby's
Jersey office. The Court applications were handled by Michael
Cushing, Jersey Managing Partner, Litigation & Insolvency
assisted by associate Davida Blackmore.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Probably the most significant change from previous practice in Guernsey law under the Companies (Guernsey) Law 2008, which came into effect on the 1 July 2008, was the consignment to history of the concept of capital maintenance, which was discarded in favour of a solvency model as the basis of a company’s ability to pay distributions and dividends.
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